Introduction: Customs is an authority or tax collection wings are being appointed by the Government in every country for controlling and for collecting of tax on the flow of goods, including live animals and hazardous items into and out of a country. Customs Act and Tariff are two regulations was evolved by the World Customs Organization to control imports and exports of goods into and out of a country. Each country has its own Customs Act and Tariff on the basis of the guidelines and principles of the World Customs Organization.

Indian Customs Law: On the basis of the world customs organization guidelines and principles, the Customs Act, 1962 and the Customs Tariff, 1975 has been framed to regulate the movement of imported goods into India and exported goods out of India.

Anti-Dumping Law: Anti-dumping measures are formulated and implemented by regulatory body of the Government of India to remove dumping margins and rescue from injury to the domestic industries.  Anti-dumping duty is one of the novel tools to protect the domestic economies from external economies aggressions. Anti-dumping law and procedures in India are based on the following Legal frame work:-

1. Pursuance of Article VI of GATT 1994.

2 Customs Tariff Act, 1975-section 9A,9B and 9C ( as amended  in the year 1995 )

3. Anti-Dumping Duty [Customs Tariff (Identification, Assessment and Collection of Countervailing Duty on Subsidized Articles and for Determination of injury) Rules, 1995] Notification No. 1/95-Cus. (N.T), dated 1.1.1995.  

4. Anti-Dumping Duty [Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of injury) Rules, 1995] Notification No. 2/95-Cus . (N.T), dated 1.1.1995.  

5. Investigations and Recommendations by designed authority of Ministry of Commerce.

6. Imposition and collection by Ministry of Finance.  

The General Agreement on Tariffs and Trade lays down the principles to be followed by the member countries for imposition of anti-dumping duties and countervailing duties. Pursuant to the GATT, 1994 Indian laws were amended with effect from 1.1.1995 to bring them in line with the provisions of the respective GATT agreements. Section 9A , 9B and  9C of the Customs Tariff Act,1975  as amended in 1995, the central Government  may be notification in the official gazette impose an anti dumping duty not exceeding the margin of dumping in relation to such article. The imposition of Anti dumping duty is based on Commodity to Commodity, country to country and suppliers in exporting countries.

Meaning of Imports: Section 2(23) of the Customs Act, 1962 defined ‘import’ with its grammatical variations and cognate expressions, means bringing into India from a place outside India.

Imported Goods:  Section 2(25) of the Customs Act, 1962 defined ‘imported goods’ means any goods brought into India from a place outside India but does not include goods which have been cleared for home consumption.

Meaning of Exports: Section 2(18) of the Customs Act, 1962 defined ‘export’ with its grammatical variations and cognate expressions, means taking out of India to a place outside India.

Export Goods: Section 2(19) of the Customs Act, 1962 defined ’export goods’ means any goods which are to be taken out of India to a place outside India.

Customs Duty:  Section 12(1) of Customs Act, 1962, specified that duties of customs shall be leviable at such rates as may be specified under Customs Tariff Act, 1975 or any other law for the time being in force, on goods imported into, or exported from, India.

Dutiable event: Once the imported goods crossed customs frontier, territorial waters of Indian customs or touched land customs station, the duty of customs leviable on the said goods and collected before the clearance for home consumption.

Proper officer: Section 2(34) of the Customs Act, 1962 defined ‘proper officer’ in relation to any functions to be performed under this Act, means the officer of customs who is assigned those functions by the Board or the Commissioner of Customs.

Customs Stations: There are number of customs stations or customs houses have been established in the country to facilitate import / export goods clearances namely Land customs, Sea port customs, Air port customs and Private Bonded warehouse or Customs Freight Stations. The said customs stations are notified customs stations as per the Customs Act, where the proper officer / Customs officer used to carry examination of cargo, customs clearance of imported goods and collect customs duty to clear the imported goods for home consumption after due assessment of Bill of entry and allow goods for exportation to abroad with due verification of the shipping Bill and physical examination of the consignment.

Continuous Simplification of Customs procedures:

In line with Government’s policy “Ease of Doing Business “ the Central Board of Excise and Customs  has taken-up the various measures to facilitate trade and commerce to bring hassle free working environment as well as  reduction of transaction costs of goods and services to make them competitive in the domestic and international market. The various initiatives taken up by the Government of India on Customs front are summarized as under:

1. Facility 24×7 Customs Clearance:  In order to faster Customs clearance of imported and export goods to reduce dwell time and lower the transaction cost, CBE & C, vide Circular No. 19/2014-Customs, dated 31.12.2014 has made facility of 24×7 Customs Clearance for specified imports, namely, goods under ‘facilitated “Bills of Entry and specified exports, namely factory stuffed containers and goods exported under free shipping Bills have made available in 18 sea ports. Similarly, facility of 24×7 Customs clearance for specified imports, namely, goods covered by facilities Bills of Entry and all exports viz. goods covered by all shipping Bills has been extended at 17 air cargo complexes.

2. Single Window project-online message exchange:  With effect from 01.04.2015 an electronic online message exchange facility has been established between Customs and the Food Safety and Standards Authority of India and the Department of Plant Protection, Plant Quarantine, Animal Quarantine, Drug Controller, Textile Committee and other regulatory agencies through message exchange. It is basically a network of cooperating facilities bound by trust and set of agreed interface specifications in which trade has seamless access to regulatory services delivered through electronic means to reduced costs, enhanced transparency, reduced duplicity and cost of compliance and optimal utilization of resources . The seamless online exchanged of information among the regulatory agencies has been started vide CBE & C, Circular No. 9/2015-Customs, dated 31.03.2015.

3. Special Notified Zone for trading of rough diamonds :With Prime Minister’s announcement of make India programme and read with CBE&C , Circular No. 17/2015-Customs, dated 26.05.2015,  a hub for trading of rough diamonds, a “Special Notified Zone” has been operationalised at Bharat Diamond Bourse at Mumbai. The procedure envisages major diamond mining companies brining in rough diamonds for display and / or auctions to be conducted within the Customs area and re-exporting the unsold consignments.

4. Adoption of Digital Signature :-  With effect from 1.04.0215 the facility of “Digital Signature “ has been introduced for importers, exporters , airlines, shipping lines etc vide CBE&C, Circular No. 10/2015-Customs, dated 31.03.2015. The introduction of digital signature will maintain data integrity, reduce cost of compliance, no requirement of physical submission of documents and encourage paper less working.

5. Reduction in mandatory documents for Customs clearances: To facilitate trade and simplify procedures. The number of mandatory documents has been reduced and only three mandatory export and import documents have been prescribed for Customs clearances. CBE&C, Circular No. 1/2015-customs, dated 12.01.2015.

6. Setting up of Customs Clearance Facilitation Committee (CCFC):  To ensure expeditious clearance of export and import goods a high level administrative Committee i.e. CCFC has been put in place at every major Customs seaport and airport under the Chairmanship of Chief Commissioner of Customs/ Commissioner of Customs. The CCFC is maintained to focus primarily on ensuing and monitoring expeditious clearance of export and import goods in accordance with the time line specified by the parent ministry /Department concerned, identifying and resolving bottlenecks, if any, in the clearance procedure of imported and export goods, and resolving grievances of members of the trade and industry in regard to clearance process of imported and export goods. Similarly, at Central level, a “Central Customs Clearance Facilitation Committee” has also been set up under the Chairmanship of Revenue Secretary to address the issue relating to Customs clearance and infrastructure impacting clearances of goods.

7. Rationalization of penal provision:Penalty provisions in Customs have been rationalized to encourage compliance and early dispute resolution under Section 82, 83, 84 of the Finance Act, 2015.

8. Withdrawal of Prosecution in certain circumstances: CBE&C, vide Circular No. 998/05/2015-CX dated 28.02.2015, instructions have been issued providing for withdrawal of prosecution where a notice has been exonerated in the quasi-judicial proceeding and such order has attained finality.

9. Life savings drugs and medicines are exempted from Customs Duty:  Life saving drugs and medicines imported by an individual for personal use are fully exempted from basic customs duty additional duty of customs subject to the condition that importer produce a certificate, in each individual case, that the goods are life saving drugs or medicines issued, by the specified Authority.

10. Relaxation of goods imported for road Construction : The requirement of certification by the Ministry of Road Transport(or NHA), for availing of Customs duty exemption on specified goods required for construction of roads, has been done away with.

11. Refund of Customs duty to new research institution:  The provision of has been made for refund of customs duties paid by new research institution  at the time of import on submission of such certificate from the Department of Scientific & industrial Research ( DSIR).

12. Exemption to import of road construction machinery:  The specified road construction machinery imported for the construction of roads are fully exempt from duties of customs, subject to the condition that the importer shall not sell or otherwise dispose of the said goods for a period of five years. However, it is clarified that the said imported goods can be sold on payment of customs duty on depreciated value.

13. Exemption to Mega Power Projects : Goods imported for setting up Mega Power Projects are fully exempt from duties of customs subject to the condition that in case of imports for a project for which the certificate regarding Mega Power Projects.

14. Relaxation of import for ship repair: The requirement of registration with Directorate General Shipping for availing the customs duty exemption by ship repair units has been done away with.

15. Reducing / eliminating printouts in Customs Clearance: CBE&C, Circular F. No. 450-25-2013- Cus IV (Pt) dated 01.10.2015, has instructed to introduce electronic messaging and paperless processing so that cargo clearance easier is to reduce the role of hard copy of documents printed in the Customs clearance process and rely upon its electronic equivalent and automated clearance processes would be a paper-free environment and reduce transaction cost.

16. Issuance of Electronic Delivery Orders :  CBE&C, Circular F.No.450-226-2014-Cus-IV, dated 14.10.2015, has introduced electronic messaging for issue of Delivery Order instead of a paper based Delivery Order for Customs clearance. As a result in considerable simplification in the Customs Clearance process and can demonstrably reduce transaction cost and time taken in the clearance of Cargo.

17. Single Window Interface for Facilitating Trade (SWIFT): CBE&C has launched Customs SWIFT clearances. SWIFT enables importers / exporters to file a common electronic ‘Integrated Declaration” on the ICEGATE Portal. The Single Window system is a crucial implementation of trade facilities measure for goods clearance at the country’s points of entry and exit. Efficiency in the import and export procedures would save large sums of money for the importers and exporters in reduced trade-related cost and delays.

18. New Rule- Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods Rules, 2016: The earlier Rules, 1996 of import of Goods at Concessional Rate of Duty for Manufacturer of Excisable goods has been replaced by new Rules with a view to simplify the rules, including allowing duty exemptions to importer / manufacturer based on self-declaration instead of obtaining permission from the Central Excise authorities. Need for additional registration is also being done away with. The new Rules will be effective from 01.04.2016.

19. Rationalization of Rate of interest :Rate of interest on delayed payment of Customs duty under section 28AA are being rationalized at  15% per Annum with effect from 1.04.2016 ( Notification No. 33/2016-Customs ( N.T.) dated 1.04.2016).

20. New Baggage Rules, 2016:The existing Baggage Rules, 1998 are being substituted with the Baggage Rules, 2016, so as to simplify and rationalize multiple slabs of duty free allowance for various categories of passengers. The new Rules are effective from 01.04.2016.

21. Import Data Processing and Management System (IDPMS) has been jointly launched with RBI to facilitate efficient data processing for payment of imports and effective monitoring.

22. Email notification service to importers for all important stages related to import clearances has been initiated.

23. Single Window Interface for Facilitation of Trade has now been extended to Export

The online-release from Partner Government Agencies (PGAs) for exports has been implemented from 05/1/2017 on wards for CITES/ wildlife items.

(Refer- Circular No. 01/2017-Customs)

24. Amendments introduced in Customs Act, 1962 by Union Budget-2017 for “ease of doing business”

With the aim to reduce the dwell time, sub-section (3) of section 46 of the Customs Act, 1962 has been substituted thereby, making it mandatory to file a Bill of Entry before the end of the next day (excluding holidays) on which the vessel or aircraft or vehicle carrying the goods arrives at a customs station at which goods are to be cleared for home consumption or warehousing .A late charge for delayed filing of bill of entry has also been prescribed.  Changes have also been introduced in sub-section (2) of Section 47 by virtue of which the importers now have to make payment of duty in the same day in case of self-assessed bill of entry and in case of re-assessment or provisional assessment the importers have one day after the bill of entry is returned. Further, sub-section (2) of section 27 has been amended to allow a simplified regime of refund of customs duty paid in excess in specified cases by providing that such refunds shall be outside the scope of unjust enrichment.

(Refer: Circular No. 12/2017-Customs dated 31.03.2017)

25. Streamlining of process of IGM amendment for import through sea

For streamlining and simplifying the process of IGM amendment in case of goods imported through sea route, Board has issued fresh guidelines for IGM amendment in order to ensure that all requests for amendment in IGM are disposed off within prescribed time limits. Further, all requests for minor amendments shall be decided administratively without recourse to adjudication or levy of penalty.

(Refer: Circular No. 14/2017-Customs dated 11.04.2017)

26. Facility for online generation of Rotation number by Shipping Lines/ Shipping Agents:

In order to simplify the generation of ‘Rotation Number’ for vessels, a facility has been developed on ICEGATE for online application and self-generation of Rotation Number by Shipping Lines/ Agents (SL/SA).

(Refer: Circular No. 20/2017-Customs dated 31.05.2017)

27. Drawback of Integrated Tax and Compensation Cess paid on imported goods upon re-export under Section 74 of the Customs Act, 1962.

Under the GST regime, goods upon import shall be subject to integrated tax and compensation cess in terms of Sections 3(7) and 3(9) respectively of the CTA, 1975. Further, in terms of Section 3(12) of the CTA, 1975, the provisions of the Customs Act, 1962 and rules and regulations made there under relating inter alia to drawback shall apply to integrated tax and compensation cess also. Accordingly, drawback under Section 74 would include refund of integrated tax and compensation cess along with basic customs duty, etc.

(Refer: Circular No. 21/2017-Customs dated 30.06.2017)

28. Duty Drawback for supplies made by DTA units to Special Economic Zones in the GST scenario.

In view of implementation of GST, Board has decided to re-organize the Customs functions hitherto handled by Central Excise formations. In this context, it has been decided that in respect of supplies made by DTA unit to SEZ Unit or developer and where the SEZ Unit or developer issues a disclaimer to the DTA supplier and drawback is claimed by the DTA supplier, the drawback shall be processed and paid by the office of Principal Commissioner or Commissioner of Customs/ Customs (Preventive) in whose jurisdiction the DTA Unit falls. Further, the fixation of Brand rate in case of supplies from DTA to SEZ Unit or developer, if required, shall also be done by the office of said Principal Commissioner/ Commissioner of Customs.

(Refer: Circular No. 24/2017-Customs dated 30.06.2017)

29. Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 Implementation.

In budget 2016-17, government had notified Customs (Import of goods at concessional rate of duty for manufacture of excisable goods) Rules, 2016. These rules applied to an importer, being a manufacturer, who intended to avail the benefit of an exemption notification issued under sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) and where the benefit of such exemption was dependent upon the use of imported goods covered by that notification for the manufacture of any excisable commodity. With the advent of Goods and Services Tax, Central Excise duty would not be applicable except on a few commodities like Petroleum products, Tobacco products etc.

In view of this Customs (Import of goods at concessional rate of duty for manufacture of excisable goods) Rules, 2016 are being superseded with Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017. The rules would come in to force from 01.07.2017

[Notification No. 68/2017-Cus (N.T.) dated 30.06.17 and Circular No. 25/2017 –Customs dated 30.06.2017 refers].

30. Export procedure and sealing of containerized cargo.

In the GST regime, the governing provisions related to exports are contained in section 16 of the Integrated Goods and Service Tax Act, 2017 (IGST Act). Supplies of goods and services for exports have been categorized as ‘Zero Rated Supply’ implying that goods could be exported under bond or Letter of Undertaking without payment of integrated tax followed by claim of refund of unutilized input tax credit or on payment of integrated tax with provision for refund of the tax paid. With the onset of GST, extant procedures relating to export of goods viz. claim of rebate/refund, stuffing of containers at the factory, warehouse or any other place from where the goods are intended to be exported etc. would require review of the existing procedures.

(Refer: Circular No. 26/2017-Customs dated 01.07.2017)

31. Extending the Single Window Interface for Facilitation of Trade (SWIFT) in Exports with WCCB to all EDI locations.

Vide Circular 1/2017-Customs dated 4.1.17, SWIFT was extended on export side to online clearance for CITES/ wild life items on pilot basis at Chennai, Mumbai, Delhi Air Cargo Complexes. Under this procedure, Shipping Bills filed on ICEGATE or through the Service Centre were referred online to the Wild Life Crime Control Bureau (WCCB) for a ‘No Objection Certificate’ (NOC), if any required for CITES/wildlife items.

It has decided to extend online referral of WCCB to all Customs EDI locations with effect from 31st July, 2017. The mapping of Customs EDI locations to WCCB offices shall remain the same as it was for imports. The Local System Managers of ICES shall map the roles in ICES to the respective officers from WCCB. These roles have been defined as part of the SW NOC module in Exports and are outlined in the user manual developed by DG (Systems). Chief Commissioners of Customs/Central Excise/GST/sensitize staff, other agencies and customs brokers working under their jurisdiction to ensure smooth implementation of the SWIFT online clearance module with WCCB in exports.

(Refer: Circular No. 31/2017-Customs dated 25.07.2017)

32. Leviability of Integrated Goods and Services Tax (IGST) on High Sea Sales of imported goods.

Integrated Goods and Services Tax on high sea sales in the case of imported goods. The council has decided that IGST on high sea sale (s) transactions of imported goods, whether one or multiple, shall be levied and collected only at the time of importation i.e. when the import declarations are filed before the Customs authorities for the customs clearance purposes for the first time.

(Refer: Circular No. 33/2017-Customs dated 01.08.2017)

33. Implementing Electronic Sealing for Containers by exporters under self-sealing procedure.

Government has introduced a new export procedure with self sealing of export container with RFID e-seals to facilitate exports in the GST regime. The earlier system of factory stuffing of export container with bottle seal under Central Excise supervision stands replaced with electronic sealing of export container under self-sealing procedure in GST regime. The objective is expected to reduce transaction costs of exporters. Since such self – sealing using RFID e-seals backed by application of technology improve visibility and enhance cargo security during transportation to ports & ICDs as well as during holding time. The RFID tag would help the Customs authorities to keep track of the container and detect tampering. The simplified procedure will reduce the need for customs examination and altogether do away with random checks and thus considerably shorten the time it takes our exporters to get their cargo shipped abroad.

(Refer Circular No.26/2017-Customs dated 01.07.2017 and 36/2017, 37/2017 and 41/2017-Cus)

34. Land mark changes in Customs Valuation Rules for Calculation of Customs Duty:  

Long ago adopted practice method of computing Customs duty for the purpose of collecting Customs duty has been undergone miracle amendment to bring down transaction cost of importers or traders. Wherein 1% landing charges has been removed while calculating Customs duty on imported goods and old calculation of computing Customs duty by adding 1% landing charges come to an end.

 (Ref. Circular No. 39/2017-Customs dated 26.09.2017)

35. Pilot Implementation of Paper less Processing under SWIFT.

In order to facilitate IT infrastructure to capture digitally signed copies of the supporting documents and   introduction of paper less processing under Single Window Interface for Facilitates of Trade (SWIFT). With the objective of reducing physical interface between Customs / regulatory agencies and trade to increase the speed of Customs clearance has been implemented.

 (Refer: Circular No. 40/2017-Customs dated 13.10.2017)

36. Manual filing and processing of refund claims in respect of Zero-rated supplies:-

In view of difficulties being faced by the suppliers of goods and services to get refund claims of IGST in respect of zero-rated supplies as well as IGST paid on export of goods and due to non- authority, on the recommendations of the Council, refund claims IGST on account of zero-rated supplies shall be filed and processed manually till further orders.

(Refer: Circular No. 17/17/2017-GST dated 15’th November, 2017).

37. Applicability of IGST / GST on goods transferred / sold while being deposited in a warehouse.

It is clarified that in respect of goods stored in a customs bonded warehouse, if a transfer of ownership of warehoused goods takes place between the importer and another person, before clearance of the goods, whether for home consumption or for export, this transaction will be subject to IGST at the value determined as per section 20 of the IGST Act read with section 15 of the CGST Act, 2017 and the rules made there under and the tax liability shall be reckoned as per section 9 of the CGST Act, 2017. Further, it is only when such goods are ex-bonded under section 68, shall the deferred duty be collected at the value as had been determined under section 14 of the Customs Act,1962 in addition to IGST leviable.

(Refer Circular No. 46/2017-Customs dated 24th November, 2017)     

Conclusion: To sum up, Role of the CBE&C towards simplification of Customs procedures to facilitate Trade & Commerce, the various initiatives taken by the Board are welcome steps and this will reduce the prices of Goods and services in the GST regime. The Board’s initiatives for “ease of doing of business” certainly will boost the economic growth of the country in the coming days.

Author Details:-

Ramesh Chandra Jena, B. A (Hons)., M.A (Eco)., D.M.M., LL.B.

Senior Manager- Indirect Taxation,  KSK Energy Ventures Limited.


Author Bio

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November 2020